Penn and U.S. Veterans Affairs will collaborate in effort to replace Philly and Coatesville VA centers

The U.S. Department of Veterans Affairs and the University of Pennsylvania Health System have signed agreements that will allow them to begin working on plans to replace the government’s out-of-date facilities in Philadelphia and Coatesville and expand care for veterans in the region.

The agreements, announced Tuesday, are the first for the Veterans Affairs department under a federal law signed by President Joe Biden last summer that allows the department to lease facilities from its academic affiliates, rather than have to build its own infrastructure with congressional appropriations.

“We need to have a modern set of facilities to meet modern care demands. We do anticipate the timeline will be much faster than prior to the PACT Act,” Shereef Elnahal, a physician who is undersecretary for health at the Veterans Affairs department, said in an interview.

Elnahal referred to the Promise to Address Comprehensive Toxics Act of 2022, which expanded benefits for military veterans exposed to burn pits, Agent Orange, and other toxic substances. That law included the unrelated leasing provision.

Kevin Mahoney, CEO of the University of Pennsylvania Health System, said the health system is motived to work with the VA because it wants to continue a decades-old relationship that includes providing health care to veterans and collaborating on education and research.

“The federal government and Penn, it’s not a partnership,” Mahoney said. “It’s nothing different than it is now except we might share some real estate.”

As part of the nascent collaboration, Penn has a preliminary agreement to buy the shuttered Brandywine Hospital from Tower Health for an undisclosed price. That now-empty hospital, which sits on 69 acres, could serve as a replacement for the Coatesville VA, which is about a mile away on the south side of Route 30. The VA would continue to operate independently from Penn, but would use the Penn-owned facility.

Penn is not reopening inpatient beds at Brandywine, Mahoney said.

The preliminary agreement between Penn and Veterans Affairs came 15 months after the department announced a national restructuring plan that included the closure of its Philadelphia and Coatesville VA medical centers, but Congress failed to form the commission that would have executed that revamp of the VA system.

Built in 1930 and located on 129 acres, the Coatesville facility would cost $120.8 million to bring up to modern building code, the VA said last year when the facility was on the chopping block.

In addition to inpatient behavioral health and substance-abuse treatment, the hospital operates long-term care, a pharmacy, and two community outpatient clinics. It had 1,189 full-time employees in 2022, including 237 nurses and 32 physicians, according to its website. Its operating budget was $201 million.

Mahoney said Penn is interested in opening a freestanding emergency department at Brandywine, but that would require legislative changes in Harrisburg. Penn’s preliminary agreement to acquire Brandywine is not contingent on the Coatesville VA moving into the facility.

After Tower Health closed Brandywine Hospital in January 2022, the emergency department at Penn’s Chester County Hospital came under significant pressure from patients who used to go to Brandywine. The same is true of Main Line Health’s Paoli Hospital.

In Philadelphia, the VA said last year that it was hoping to establish a “strategic collaboration” with Penn Medicine that would allow it to close the VA Medical Center in University City, where Penn faculty and physicians have been treating veterans since 1948.

Elnahal said the agency’s aim is to “build a new Philadelphia VA Medical Center.” But plans on what that would look like are still in their infancy, VA officials said, and stressed that the current VA medical facility in West Philly is not closing.

Mahoney’s idea is that Penn would build another new inpatient tower in University City, part of which it would lease to the VA. He called it a “hospital within a hospital.” The facility would include substantial outpatient facilities.

Penn opened a new patient pavilion at the Hospital of the University of Pennsylvania in the fall of 2021.

The current Philadelphia VA facility employed 3,036 people full-time last year and had an annual budget of $718 million, according to its website.

Editor’s note: This article has been updated with additional comment about the future of the University City VA Medical Center building.